By on June 6, 2015

Chrysler 300 (Aus)

As we reported earlier, Clyde Campbell and a number of his associates, including his successor Veronica Johns and former boss Ernst Lieb by way of his Motorworld dealerships, are being named in a misappropriation case claiming $30 million AUD was funnelled out of company coffers.

This weekend, more details have come to light, including how Campbell was able to pilfer FCA funds without raising red flags in Detroit.

The story verges on conspiracy and includes the wife of Campbell, his successor, a formerly disgraced Daimler executive, a casino, a boat and extravagant homes paid for by FCA without its knowing. Even Campbell’s wife’s hairdresser received a free Jeep as part of the brand’s “ambassador” program.

Mark Hawthorne of The Sydney Morning Herald remarked, “It has all the makings of a Hollywood script. In Elizabeth Hurley, it even has the presence of a Hollywood star.”

According to the article published today, $20 million (all figures in Australian dollars) was spent on overpriced dealer website services, $550,000 on a “mobile outdoor floating billboard” that is allegedly a 40-foot Chris Craft boat owned by Campbell, $1 million Christmas parties that included Louis Vuitton bags as employee gifts, over $500,000 – and possible nearly $2 million – in travel expenses, and a private suite for Campbell and his friends – including former fired Mercedes-Benz USA CEO and president Ernst Lieb – to enjoy the Monaco Grand Prix.

Campbell served under Lieb
Ernst Lieb did an eighteen year stint in multiple roles at Mercedes-Benz Canada Ltd. between 1985 and 2003. It’s where he rode out the “merger of equals” between Daimler and Chrysler as he served in his final position, CEO and president, of the Canadian subsidiary.

In 2003, Ernst moved to Australia and took the same titles at the Australian arm of the newly-merged DaimlerChrysler. That’s where he became the boss of Clyde Campbell. Ernst would leave Australia in 2006 to become CEO and president of Mercedes-Benz USA, but not before Campbell signed a contract for dealer website services with Motortrak, a British digital retail marketing agency owned by Gary Pask.

By May 2007, Daimler would divest itself from Chrysler, with Cerberus Capital Management taking a 80.1 percent stake in the American business.

Starting January 2008, Campbell served as managing director of Motortrak in its Australian office. His wife, Simone, was director and company secretary starting in May 2009. During his time at Motortrak, Campbell sold a website services deal to Lieb for all Mercedes-Benz dealers in the United States.

“That was the making of Motortrak and the making of Gary Pask as one of the richest businessmen in the UK,” a former Motortrak staff member told The Sydney Morning Herald.

“The whole deal was done by Clyde.”

During this time, Chrysler received $12.5 billion (USD) from the U.S Treasury and $1 billion (CAD) from the Canadian and Ontario governments. The bailout cash was provided under the condition of a Fiat takeover.

Clyde left Motortrak in September 2010, with his wife following one month later. Two days after she left the retail marketing company, Clyde Campbell was appointed managing director of the now-Fiat-controlled Chrysler Australia.

In October 2011, Lieb was fired from Mercedes-Benz USA for using corporate funds to pay golf club fees, granting rentals for vehicles in exchange for flight upgrades, and using $100,000 in corporate money to perform upgrades in his private home – including a home theatre, gym, washer and dryer, and built-in barbecue. A later wrongful dismissal suit launched by Lieb against Mercedes in Germany was dismissed, with the court stating the claims were “so serious that any further employment [at Daimler] would be unacceptable.”

An unnamed Daimler executive at that time told German paper Handelsblatt, “Ernst was warned, but he has done it again.”

Another Motortrak contract, Lieb’s Motorworld and Campbell’s high life
Almost as soon as Campbell returned to FCA in 2010, he signed another contract with former employer Motortrak. The initial amount of $690 a month for website services per dealer would balloon to $4,100. This was charged to the network’s 184 dealers.

More than $20 million was paid to Motortrak from 2011, claims FCA, “substantially greater than the cost for similar web services provided by Motortrak itself and by competitors.”

Shortly after, disgraced Lieb would return to Australia to become co-owner of the Motorworld dealership group along with David Piva.

“After working all my life in the wholesale sector, I am now in the ‘real’ business of the Automotive Industry – the retail business!” Lieb said in a press release announcing his arrival at Motorworld.

FCA alleges it incurred some $4 million in damages in deals between the Campbell-led subsidiary and Lieb-owned Motorworld, including “marketing support and to help it buy property, specifically the Brighton dealership,” reports The Sydney Morning Herald.

Campbell was well known as one of the biggest-spending marketers in Australia. The company would end up sponsoring horse racing, soccer players in multiple leagues, events, Crown Resorts, professional sports teams, and provide vehicles to celebrities the world over.

While there were only 45 official “ambassador” program vehicles documented in 2013, staff said the number was closer to 100. The program was so pervasive, even Simone Campbell’s hairdresser, Karlose, received a Jeep for free.

Travel expenses skyrocketed. Campbell incurred $537,849 in travel expenses in his own name. However, it is believed he also incurred – in whole or in part – an additional $452,138 in 2012 and $445,556 in 2013 in travel expenses submitted under the names of employees who had no business traveling.

Part of this travel was a trip to Monaco. Campbell, along with Lieb and Pask, enjoyed multiple stays at the Monaco Grand Prix.

Lavish parties were also the norm for Christmas. Approximately $1 million each year was spent on the annual employee Christmas party held at Crown Palladium, with an estimated 100 suites booked at Crown Towers and Crown Promenade hotels for staff, guests, brand ambassadors and media. This started under Campbell’s leadership and continued under his successor, Veronica Johns.

$550,000 “mobile outdoor floating billboard”
Allegedly, in March 2013, Campbell contacted FCA’s advertising agency Maxus to direct payment on four invoices of $137,500 each, for a total of $550,000, provided by My Alfa Romeo. The invoices were for a “mobile outdoor floating billboard”.

My Alfa Romeo, partly owned by Crown Resorts’ Ishan Ratnam (a.k.a. Ishan Kunaratnam) and Campbell’s wife Simone, is said not to have delivered said billboard. Instead, FCA alleges the money was used to purchase a 40-foot Chris Craft boat valued at $400,000 owned by Campbell.

Ratnam’s lawyer, John Price, stated, “There is a contract between My Alfa Romeo and FCA and the billboard was provided. My client denies that assertion, as certainly Fiat Chrysler did receive it.”

From Campbell to Johns, the spending continued
In April 2013, Veronica Johns took over the role vacated by Campbell when he moved to New Zealand-based distributorship Fiat Chrysler NZ Limited of which he took a 50 percent stake. The other half of the NZ company is owned by Ateco Automotive executive chairman Neville Crichton.

However, the change in leadership didn’t mean the money would stop flowing from FCA.

At the time, FCA touted their new leader Johns as “the first Australian woman to head the local division of a major car company.”

After a $3.1 million renovation of the company’s Melbourne headquarters done by Madok, a construction company controlled by Mitchell Knight, the same company was contracted to perform upgrades to John’s private residence with the work invoiced back to FCA.

Three cars were purchased as prizes for two charities and a soccer club. Two of those vehicles would end up registered to Mitchell Knight and one to Gregory Hede, John’s husband. Knight sold at least one of those vehicles back to the City Chrysler Jeep Dodge dealership at a $20,000 premium. FCA claims the vehicles were funnelled through the Lieb-owned Motorworld group.

A Fiat Abarth race team was funded by the FCA Australian subsidiary under Johns. It was budgeted at $500,000 but cost $800,00 in all. Clyde Campbell and Gregory Hede competed as drivers in those cars, their racing licences paid for by FCA.

Other expenses mentioned in the case include an $11,000 bill rung up by Johns at Crown Towers.

In September 2014, FCA alleges Campbell, his wife Simone, Lieb, his wife Petra and other guests took a three-day trip to a luxury golf and spa resort in New Zealand on FCA’s dime under the leadership of Veronica Johns without proper authorization.

One month later, Johns left FCA for “personal reasons” after less than two years at the post and a total of 16 years with the company.

How did it all happen?

“The spending was out of control,” told former staff member to The Sydney Morning Herald. “And anyone who questioned it was shown the door.”

When Johns left the top post, FCA appointed Chrysler parts business head Pat Dougherty as the new president and CEO of the Australian subsidiary. When he arrived, employees lined up at his door to tell the story, reports The Sydney Morning Herald, which Dougherty then reported back to Detroit.

Auditors arrived in Melbourne in late January.

How it all happened in the first place, Dougherty is keeping mum.

“FCA Australia will not engage in a running commentary on matters currently before the courts”, he told BusinessDay.

However, many think a lack of control and oversight is due to the DaimlerChrysler fiasco and Chrysler’s recent merger with Fiat. With Italian and American managers preoccupied with larger corporate matters, executives in Australia were able to operate virtually autonomously, especially as sales grew.

Campbell is stating he’s innocent through his lawyer.

“We are confident that, in due course, the allegations will be shown to be wrong and will be embarrassing for FCA,” Campbell’s lawyer Sam Bond told The Sydney Morning Herald.

[Sources: 12, 3, 4, 5, 6, 7, 8, 9, 10]

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28 Comments on “Aus. FCA Misappropriation Case Includes Former MB, Current Crown Resorts Execs...”

  • avatar
    Bad Bart

    With the money involved, it makes me wonder how many other similarly convoluted schemes are being perpetrated by more sophisticated operators.

    • 0 avatar

      You are absolutely right, this is just peanuts compere to what really goes on in the world…

    • 0 avatar

      Not a great time for FCA to have this scandal. Low key at the moment, but Jeep is having some very bad press in Australia throw in the un reliability of Fiats (not their Truck division) and you have the perfect storm

  • avatar
    Big Al from Oz

    You don’t get to the top by being nice and moral.

    If you make lots of money it’s generally illegal or immoral or verging on the two.

    What I find that is amazing is Campbell/FCA Australia used US and Canadian GFC bailout money to fund their lifestyle.

    Maybe FCA should look at the governance and accountability side of the business.

    I do see a movie. It would be along the lines of the “Wolf of Wall Street”. I don’t know of a good title.

    This also highlights the use of taxpayer funds for corporations, business and unions. If it was just FCA money, who would care?

    I wonder if this will open a can of worms in the industry on the blatant waste of overpaid executives.

    Well, the US taxpayer subsidises each and every vehicle manufactured/assembled in the US to the tune of $3 000 (2013). Is this money being used wisely? Or should the auto industry learn how to be competitive?

    • 0 avatar
      Bad Bart

      You bring up a lot of very interesting points! Especially re the use of government subsidies. Certainly not suggesting they’re any worse, but I saw an interesting piece recently on the role of assorted government incentives in the viability and success of Tesla.

      • 0 avatar

        @BAFO – You guys lost an auto industry that never should have happened in the 1st place. Get over it already. Let it go bro!

        But spoken like a true 99%’er, the attitude about “immoral or illegal…”

        So yes it’s the same 99%’ers getting caught daily, stealing cash hand/fist from the honest and hard working 1%. It’s getting harder to get away with it though. I’m a vender of one small company that caught their secretary stealing hundreds a day for several years. Another company has one guy for several stores that all he does all day is make sure all the numbers line up.

        OZ is so easy to forget that it was the perfect crime almost, allegedly.

      • 0 avatar
        Big Al from Oz

        I do believe Musk to be one of or the biggest recipient of welfare in the US. Many try and paint Musk as a hero along with Tesla.

        I really do think all of this handout/subsidy money could of been better spent improving infrasture, ie, roads, NG pipelines etc.

        This would save more CO2 than wasting money on Musk.

        Many leading billionaires are such. They use their influence to feather their beds at the expense of the consumer.

        I saw a fantastic documentary last night on the Aristocracy in the UK during the Ewardian era. I see many parallels in the US.

        The funny thing is the demise of the British Aristocracy was their own making, by clinging onto the past and their influence in the House of Lords.

        WWI spent the end of them. The Aristocracy military leaders killed many good men through incompetent leadership on the battlefield.

        At the end of WWI the Aristocracy fell apart. The House of Lords had little power and the UK moved on to what it is today. The US and Australia had a part in the breakdown of the Aristocracy. With global logistics and trade the US and Australia could provide cheap food and commodities.

        The Aristocrats relied on agriculture and tried to protect it. This is another reason why I believe in free trade. You can’t have the Upper Class take advantage of the consumer.

        The world will end up broke with a disproportionate wealth across a nations populace. But any billionaire will not do what is good for the country first (unless he can profit), he/she will do what benefits them financially.

        The odd thing is if the middle class and lower class have a greater income at their disposal, the rich will get richer anyway.

        Many in the UK up until WWI lived in Third World conditions, catering to the whims of the Aristocracy.

        The US faired better, it had a more egalitarian society, but the US is moving towards a society with greater disparity.

        I hope Australia doesn’t follow the footsteps of the US and UK in that respect.

        I don’t think the forefather in the US envisaged the US to be the way it is now. They would of like a fairer nation.

        • 0 avatar

          Forget class the Oz don’t have any. It all comes down to personality. There are personalities who shouldn’t be trusted with power or public money.

          The best we can do presently is hold them accountable for their actions.

          • 0 avatar
            Big Al from Oz

            It is not so simplistic.

            What I see is poor mentoring and leadership on FCA’s part.

            With the poor mentoring and leadership provided by FCA lead to Lieb and Campbell becoming poor leaders and mentors.

            They used fear to manage the way in which they operated. This is no different than the way mobsters, bikies, terrorists operate. It’s just at a different level.

            Fear and respect appear to be similar when viewed, but operate on completely different paradigms.

            It’s all corruption. This form of corruption can only occur when there is a complete breakdown of processes and procedures to ensure accountability.

            Lieb and Campbell were very poor leaders and FCA should of seen this. FCA should be held accountable here as well.

            It seems the people under Campbell went to the new boss as soon as possible to point out what did occur.

            But, they sat on their hands due to fear.

            I do think many white collar crimes are judged diffently from “organized” crime.

            But it’s all the same. The sh!t of society float to the top.

        • 0 avatar

          Big AL I think you are wrong about Elon Musk. Space X had to sue the US military in order that they have a fair chance to send military cargo to space. They won, breaking the Boeing monopoly and should now save taxpayers billions of $’s. They had to pay the legal costs I guess. This money most likely makes the money Tesla gets seem like pocket change. Tesla did take a federal loan but they paid it back, that’s not taking money. Each model S buyer gets federal money so I don’t consider that direct tax money benefit either. The State of Calaforni gives Tesla energy credits so that is about the only “handout” they get. This is also pittance compared to big oil tax breaks and some other bigger coporations get.

    • 0 avatar
      Athos Nobile

      “I wonder if this will open a can of worms in the industry”

      It should. Although maybe not.

  • avatar
    Big Al from Oz

    The only connection of this photo to this article is the vehicle’s engine is based on a Hemi, sort of FCA’ish, Chrysler’ish or more correctly Keith Black’ish.

    Spectacular and scary for the driver.

    I’m surprised TTAC doesn’t cover major racing events globally. This is the largest drag meet outside of the US globally.

  • avatar

    My Ex-GF’s husband had a nice scam going where he worked. He and the woman he was cheating on my ex with, his second in command of part of the purchasing for the company, had a non existent company billing for never seen supplies. The free money, split 50/50, financed his gambling/drinking problems. His sweetie was smart and bought a lot of SoCal real estate with her share. This scam got them each about $60K a year, for like 5 years. It all came apart when the company merged with a competitor, and they did a top to bottom audit of both companies. Somehow, his dad gave him the money to pay back (For both of them) and he was able to just “resign for personal reasons”. His GF, not being blamed for anything, got his job, and went right back to scamming them again. She didn’t realize that the bosses had all the purchasing watched with a microscope, and she was soon busted. She got like 18 months in jail. My ex’s hubby, in the meantime, got a BETTER job at another company, but managed to drink his way out of it in 2 years, and knock up a 22 year old bimbo he met at a strip club about the time he was fired. Now, he lives in Vegas, where he is on a liver transplant list, in a dumpy apartment. Only his trust fund keeps him from being on the street. He spends most of his time sitting in sports books and calling his daughter with my ex, and annoying her. I just have to laugh that her dad HATED me, but loved the loser she ended up marrying.

    • 0 avatar

      It’s nice to read about grifting scumbags that get what they have coming to them instead of becoming shoo-ins for the Democratic presidential nomination.

  • avatar

    The story does not “verge on conspiracy”. It was the actions of the people involved that can be said to verge on conspiracy.

  • avatar

    “granting rentals for vehicles in exchange for flight updates”

    Did you mean upgrades? Or as in updates on when his plane arrives?

  • avatar

    So where does Elizabeth Hurley come into it?

    • 0 avatar

      She’s gonna play Veronica Johns in the movie. They’ll change the script so she’s blameless, because she’s too hot to be the baddie. Her husband was in on it, so he’ll be the controlling husband who leads her astray.

      Actually, there was a line there about lending free cars to celebrities. I assume she’s one of them (I’d lend her my car for free too).

  • avatar
    Tomas De Torquematic

    Speaking of movies,readers may want to revisit that old time Spaghetti Western Classic, ‘A Fiat Full of Dollars’

    Just trying to remember how it goes. Something I think like…

    Greasy FCA-type pacing back and forth in an upstairs suit of the saloon mutters to female companion, “I just don’t understand it! “A few dollars more! That’s not to much to ask, right?”
    A reply is not offered, firstly because rolling in a fresh Rubicon every whimsday means a gal knows when to keep her mouth shut and secondly, the sun is blocked from their window due to a newly completed, pyramid stack of Rav 4’s at the rival dealership next to the Barber Shop. Straight above the General Store,this patch of darkness also makes the jumbo electronic billboard of a geisha popping a pill and smiling easier to see.
    Rav 4s’ shadow shrinks rapidly as townsfolk can get one half price with every white Camry purchased.
    Then, suddenly at the end of the dusty street, the tumble weeds part for the silhouette of a tall stranger just standing there.
    Sunlight glints on his spurs.
    And the handle of his pistol.
    And the Pentastar shaped badge on his chest.
    The Mopar Man With No Name.
    FCA Man reels back from the window, snatches his gun belt from the bed post and spills out onto the street, wine-buzz courage steadying him as he shapes up and starts shooting at the Mopar Man.
    To FCA Man’s amazement his bullets, though finding their target have no effect!
    Mopar Man says NOTHING as he flicks back his poncho to reveal a 245 cubic inch, inline 6 engine from a 1995 Cherokee roped to his chest.
    (MM insisted the blacksmith provide him with something ‘bullet-proof’.
    In the blink of an eye, Mopar Man empties his 6 shooter into the FCA Man, strolls over to the twitching corpse and heaves the engine on top for good measure.
    Said female companion of FCA man comes running over to hold a dead, outstretched hand and starts sobbing at the realisation the money’s all gone as the departed’s feet start to curl up and retract under the Jeep engine like the Wicked Witch of the West.

    Mopar Man With No Name silently tips his hat, turns, heads toward the sunset.

  • avatar
    Tomas De Torquematic


  • avatar

    Hell this type of fraud goes on everywhere, including the Catholic church in Germany.

    Round these parts, it was common for local government officials to get things like a repaved driveway: “Hell we ordered one asphalt truckload too many for repaving Back Street. Where do you want us to put it, Sam?”

    And such fraud is often overlooked by organizations as being too embarrassing to reveal, until things get so blatant they have to act.

    Canada spent $2 billion on the Chrysler bailout, not a mere billion. It was always 20% of the total, both GM and Chrysler. And that doesn’t include a $810 million loan pre-bailout that got completely lost.

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